Just finished doing a TB + tensioner pulley + idler pulley and a new gasket on the WP, on the sled (98 V70). It was my first time. Your motor is different and probably has VVT. Mine doesn't.
I left the crank pulley alone. Lined up the marks, then cut off the old belt to save time. As an experiment, I tried moving both camshafts with my hands. The intake wouldn't move at all. The exhaust did move with some effort a few degrees, so I just moved it back. I didn't use any tool to lock the camshafts.
After slipping on the new belt, I was off by about 4 teeth on the exhaust cam. So I pulled it off and rotated it back into position. Put the belt back on. This time I was off 1 tooth. Repeat. The third time I was lined up. Turned the crank over twice and I was still lined up. So I pulled the pin out of the hydraulic tensioner, let it expand for a few minutes and turned the crank over two more times. All OK.
Astro is correct about the pulley bearings causing a problem instead of the belt. The fact is belt breakage is very, very rare by itself. It's not just rubber, it's a steel belt incased in rubber from what I understand. On my recent change, the TB was beginning to slide off the idler pulley about 3/16". Good thing I caught it when I did. After pulling the belt & pulleys, I discovered that the idler bearings weren't loose, but they were beginning to dry out. The pulley would spin about 6 sec when spun by hand. The tensioner pulley bearing was a loose and would spin about 30 sec! Shouldn't do that...at all.
After replacing the belt + two pulleys with geniune Volvo parts from a dealer, the TB is back to correctly tracking.
Re your final Q: No, the cams + crank are not free to move. My crank never moved, neither did the intake cam, only the exhaust with some considerable effort. I was a bit worried about this as well being my first TB, but it's OK.